CFD News: IG Markets Worth More Than London Stock Exchange
Financial betting operator London Capital yesterday downplayed the impact of Betfair’s nascent CFD trading platform, insisting it would not affect their core business.
London Capital’s chief executive Simon Denham stated that Betfair’s recently debuted LMAX platform would not hurt business as his company announced substantial revenue growth in the first half of 2010 courtesy of volatile financial markets.
Last month Betfair’s new platform, LMAX, was approved by the Financial Services Authority, which regulates financial services in the UK. LMAX is still being developed by Betfair and will specialise in contracts for difference (CFD) betting, operating apart from the betting exchange’s existing Tradefair spread betting product.
Unlike spread bets CFD’s are liable to capital gains tax in some cases. Denham, however, felt that it was worth commenting on the venture, which now has the backing of US banking giant Goldman Sachs, as part of London Capital’s interim report published yesterday. In addition, Denham argued that ever increasing regulatory and capital requirements make the success of new entrants to the financial betting market “increasingly unlikely”.
London Capital already plays host to Betfair’s spread betting offering, Tradefair, as part of its white-label business, which includes backend provision for companies such as Paddy Power and PartyGaming.
Financial betting has seen significant growth over recent years, assisted by world-wide market jitters, and on July 2 this year the UK’s market leader IG Group attained a higher capitalization value than the London Stock Exchange.
Despite contending that Betfair’s plans would not affect the company, London Capital said yesterday that it too would be launching a pair of CFD offerings.
Ongoing financial uncertainty has benefitted the company, with revenues leaping 61 percent year-on-year, from £12.9m in the prior-year period to £20.9m in the last six months.
